Project Initiation, Part 5 – Develop Winning Proposals

After the statement of work is approved, the project team (internal or external) must evaluate and respond.  The result is a combined technical and cost proposal, or in some cases simply a bid.

Proposal Considerations

The team of employees who will eventually perform the work should prepare the proposal.  This can apply to in-house projects as well as to projects for an external customer.  The proposal, if it is very detailed, may eventually become the project management plan with few if any revisions.  In some cases, the proposal provides only enough detail to justify ability to perform, costing, and scheduling, with the project management plan intended to provide the remaining details at a later time.  The following activities would be performed when preparing a detailed, competitive proposal.

Analysis of required deliverables (products and services).

List the knowledge, skills, and equipment required to perform; organize tasks and subtasks so that duration and cost estimates can later be applied to each item; assign specific pieces of the proposal to qualified individuals and give them deadlines for drafts to be completed.

Resources and logistics.

Evaluate your capacity compared to the required capacity to perform on schedule; identify external support that would be required.  Make lists of critical logistical concerns that must be addressed due to location, climate, safety, access, quality testing, times of day or week, sequencing of specialized tasks, possible breakdown of critical equipment, etc.

Level of quality expected.

Does this project require more or less quality assurance and quality control than your standard procedures?  If so, adjust the proposal accordingly.  A future article will address quality assurance and quality control.

Cost estimating and scheduling.

Complete these items to the level of detail sufficient to be comfortable with your proposal and to satisfy the customer you are being realistic.  The more tasks and subtasks you identify and include, the more accurate your predictions will be.  Use a costing structure that can later be loaded into your accounting system for tracking and invoicing.

Risk assessment and mitigation.

What items in the statement of work make us nervous?  What are the significant things that could go wrong, and for each one how would we handle it?  Would change orders be issued to amend budgets and schedules, or would the problem be our problem?  What contingencies would we therefore need to build in; what assumptions and exceptions would we have to incorporate into our proposal; and would the customer still accept our proposal if we submit in this fashion?  Would we still have the required capacity if one or more of our key people left the company or was sick on an extended basis?  Are subcontractors allowed, and if so, under what conditions.  Can we push risk onto subcontractors, or buy specific insurances?  Do we fully understand the indemnification and insurance requirements for pricing purposes?

Legal and regulatory issues.

If the solicitation did not supply all the contract clauses, request them.  You can’t fully price a project until you know the details for insurances, indemnifications, and if/how subcontractors will be approved.  Sign teaming agreements, discuss subcontract language with potential subcontractors.

Production of draft proposal and/or presentation.

The customer sometimes provides detailed instructions.  Follow them very carefully.  Organize the proposal such that key elements are easily identified and it is easy for reviewers to evaluate your proposal against the RFP.  Complete your proposals and/or presentations well in advance to allow for internal reviews.  Consider hiring technical writers if there is much text involved.

Internal reviews.

Have senior, qualified employees who prepared portions of the proposal review the entire proposal for continuity.  Have senior, qualified employees who were uninvolved review the entire proposal.  Conduct practice sessions for all presentations.  Your best presenters may not be the technical experts, so your presentation team may consist of presenters and experts who are also present to answer difficult questions.

Obtain buy-in from all suppliers.

If you have contractors, subcontractors, and/or vendors on the team, you must obtain written pricing from them prior to submitting your proposal.  At the very beginning you should supply to them the contract clauses and their payment terms (pay when you are paid, net 60 or other).

Assumptions, exceptions, options.

Refer to these in your cover letter, and provide details of why you feel any assumptions, exceptions, options were necessary.  Your primary proposal should respond exactly to the solicitation; use an attachment to explain proposed options and the pricing for these options.  If you don’t want the customer to disclose your options to your competitors, mark them as confidential and proprietary.

Final proposal, presentation, cover letter.

Assurance of delivery.

Follow up to verify your e-mails and/or packages arrived.  If you send proposals by overnight courier to arrive on the date due, consider sending in duplicate using 2 different carriers.

Next Article in This Series:  A Project Initiation Quiz.

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About the Author

An engineer by training, Randy Klein has 30 years of consulting experience, 20 of which have included project management duties.  His project management curriculum has been used by a variety of university continuing education departments and private resellers.  He invites your questions and comments related to project management, quality assurance, and organizational improvement.  Contact Randy at (801) 451-7872 or projects@streamlineut.com.

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